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A BILL TO BE ENTITLED
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AN ACT
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relating to the use of certain automated systems or personnel in, |
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and certain adverse determinations made in connection with, the |
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health benefit claims process. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter D, Chapter 843, Insurance Code, is |
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amended by adding Section 843.114 to read as follows: |
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Sec. 843.114. CERTAIN DISCLOSURES REQUIRED IN EXPLANATION |
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OF BENEFITS. A health maintenance organization shall include in a |
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written explanation of benefits provided to an enrollee and a |
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physician or health care provider: |
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(1) a disclosure stating whether artificial |
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intelligence was used in any part of the claims process, including |
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coverage determinations and utilization review; and |
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(2) if applicable, a plain language description of the |
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method by which the health maintenance organization or utilization |
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review agent used artificial intelligence. |
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SECTION 2. Subchapter A, Chapter 1301, Insurance Code, is |
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amended by adding Section 1301.011 to read as follows: |
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Sec. 1301.011. CERTAIN DISCLOSURES REQUIRED IN EXPLANATION |
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OF BENEFITS. An insurer shall include in a written explanation of |
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benefits provided to an insured and a physician or health care |
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provider: |
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(1) a disclosure stating whether artificial |
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intelligence was used in any part of the claims process, including |
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coverage determinations and utilization review; and |
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(2) if applicable, a plain language description of the |
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method by which the insurer or utilization review agent used |
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artificial intelligence. |
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SECTION 3. Section 4201.002, Insurance Code, is amended by |
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amending Subdivision (1) and adding Subdivisions (1-a), (1-b), and |
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(1-c) to read as follows: |
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(1) "Adverse determination" means a determination by a |
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utilization review agent that health care services provided or |
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proposed to be provided to a patient are not medically necessary or |
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appropriate or are experimental or investigational. |
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(1-a) "Algorithm" means a computerized procedure |
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consisting of a set of steps used to accomplish a determined task. |
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(1-b) "Artificial intelligence system" means any |
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machine learning-based system that, for any explicit or implicit |
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objective, infers from the inputs the system receives how to |
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generate outputs, including content, decisions, predictions, and |
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recommendations, that can influence physical or virtual |
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environments. |
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(1-c) "Automated decision system" means an algorithm, |
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including an algorithm incorporating an artificial intelligence |
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system, that uses data-based analytics to make, support, suggest, |
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or recommend certain determinations, decisions, judgments, or |
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conclusions. |
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SECTION 4. Subchapter D, Chapter 4201, Insurance Code, is |
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amended by adding Section 4201.156 to read as follows: |
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Sec. 4201.156. USE OF AUTOMATED DECISION SYSTEM FOR ADVERSE |
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DETERMINATIONS. (a) A utilization review agent may not use an |
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automated decision system in any way to suggest, recommend, |
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generate, provide, make, or assist in making, wholly or partly, an |
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adverse determination. As provided by and subject to Section |
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4201.254, only an appropriate physician, dentist, or other licensed |
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health care provider may make an adverse determination in |
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accordance with Section 4201.254. |
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(b) The commissioner may audit and inspect at any time a |
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utilization review agent's use of an automated decision system for |
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utilization review. |
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(c) This section does not prohibit the use of an automated |
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decision system for administrative or fraud-detection functions in |
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connection with utilization review. |
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SECTION 5. Subchapter F, Chapter 4201, Insurance Code, is |
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amended by adding Section 4201.254 to read as follows: |
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Sec. 4201.254. PERSONNEL REQUIRED FOR ADVERSE |
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DETERMINATION. (a) An adverse determination must be made by an |
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appropriate physician, dentist, or other health care provider who |
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is: |
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(1) an individual licensed in this state under Title |
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3, Occupations Code; and |
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(2) acting in accordance with the laws of this state |
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including requirements under Section 4201.252 and within the scope |
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of the individual's applicable license issued under Title 3, |
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Occupations Code. |
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(b) Notwithstanding any other law, for a health care service |
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ordered, requested, provided, or to be provided by a physician, an |
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adverse determination must be made by a physician with a permanent |
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unrestricted license to practice medicine in this state who is of |
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the same or similar specialty as the physician who ordered, |
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requested, provided, or proposes to provide the service. |
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(c) Nothing in this section authorizes an individual to act |
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outside of the scope of the individual's applicable license issued |
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under Title 3, Occupations Code. |
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SECTION 6. Section 4201.303(a), Insurance Code, is amended |
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to read as follows: |
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(a) Notice of an adverse determination must include: |
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(1) the principal reasons for the adverse |
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determination; |
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(2) the clinical basis for the adverse determination; |
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(3) a description of and [or] the source of the |
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screening criteria and review procedures used as guidelines in |
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making the adverse determination; and |
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(4) a description of the procedure for the complaint |
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and appeal process, including notice to the enrollee of the |
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enrollee's right to appeal an adverse determination to an |
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independent review organization and of the procedures to obtain |
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that review. |
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SECTION 7. (a) Sections 843.114 and 1301.011, Insurance |
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Code, as added by this Act, apply only to the provision of a health |
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care service under a health benefit plan delivered, issued for |
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delivery, or renewed on or after January 1, 2026. |
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(b) Chapter 4201, Insurance Code, as amended by this Act, |
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applies only to utilization review conducted for a health benefit |
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plan delivered, issued for delivery, or renewed on or after January |
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1, 2026. Utilization review conducted for a health benefit plan |
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delivered, issued for delivery, or renewed before January 1, 2026, |
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is governed by the law as it existed immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 8. This Act takes effect September 1, 2025. |
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